Monday, May 24, 2010

Cliffs Natural Resources (NYSE:CLF) "Big Daddy" Acquisition

Cliffs Natural Resources (NYSE:CLF) is putting together a strategy to acquire either Spider Resources Inc. (SPQ.V) or KWG Resources Inc. (KWG.V) in order to get a majority stake in the "Big Daddy" chromite project in Northern Ontario. The company could even acquire both of them if they can swing it.

Each of the companies, KWG and Spider, hold a 26.5 percent stake in Big Daddy.

The good news is the company won't have to use debt to make the acquisition, as they have enough cash to do a deal.

While they said they're interested in both companies, making a deal with one isn't conditional for a deal with the other.

At this time Cliffs has a 47 percent stake in the Big Daddy chromite project, and is offering each company C$0.13 a share in cash.

No comments: